Pennsylvania's Early-Retirement Offer Draws Few Takers
The deadline for teachers and other Pennsylvania school employees to take advantage of a special one-time early-retirement offer passed last week, with the plan apparently falling far short of its potential.
The offer, designed primarily to save financially strapped school systems money by allowing them to reduce the size of their teaching force or to replace retiring senior teachers with younger teachers at lower salaries, was proposed by Gov. Richard L. Thornburgh last April and approved by the state's legislature in June.
The Governor's office estimated that if one-quarter of the approximately 12,000 eligible school employees--the majority of them among the state's approximately 98,000 teachers--took advantage of the plan, school systems in the state could save as much as $72 million. (See Education Week, April 28, 1982.) However, as the deadline for school employees to resign passed last Tuesday, only 1,152 people--about 10 percent of those eligible--had retired under the plan, according to M. Andrew Sheffler, executive director of the Pennsylvania Public School Employees Retirement System.
"It looks as though there will be substantially less than had been expected," he noted, adding that it will be several months before the plan's savings to school districts can be calculated.
However, while the deadline for teachers to notify school districts of their intention to resign under the plan passed last week, school districts still have 90 days to file the names of their retiring teachers with the retirement system. Mr. Sheffler said he expects between 200 and 300 more applicants, most of them from the Philadelphia school system, which, as of last week, had not reported any names to the retirement system.
Governor Thornburgh had said the plan could save the School District of Philadelphia up to $46 million in salaries and benefits if all of its estimated 1,400 eligible teachers took advantage of the offer.
Frederick E. Leuschner, a spokesman for the Pennsylvania Education Association, attributed the low response to the short period--three months--given school employees to decide whether to opt for the early-retirement plan. "It's very difficult to make a major career change in such a short amount of time," he said. The state's teacher organizations had supported the early-retirement plan.
The depressed state of the nation's economy was also mentioned frequently as a reason for the lower-than-expected response to the plan.
"In many cases, the pension wouldn't be enough to live on," said Thomas J. Gentzel, assistant director of governmental relations for the Pennsylvania School Boards Association. "And unemployment is high, making it tough for someone who's been teaching for 25 years to find another career. Also, there is also a gap in many of these cases between retirement and eligibility for benefits such as social security."
The average pension of a Pennsyl-vania school employee who retires with full benefits is $6,100 per year. An employee's pension is based on the number of years of service and the average of his or her three highest annual salaries.
Under the plan, school employees 55 and over were allowed to take early retirement with full benefits in June, July, and August, if they had 25 years of service. Teachers between the ages of 50 and 55 with 25 years of service were eligible to collect 85 percent of their full pensions. (Normally, such retirees would collect about 50 percent.)
As of Sept. 1, when the early-retirement offer expired, the state reverted to its usual way of calculating pensions. School employees, as in the past, must: be 60 years of age with 30 years of sevrice; have 35 years of service regardless of age; or be 62 years old with at least one year's teaching experience.
Vol. 02, Issue 01